Number of the Week: Top 20% of Earners Take Home 51% of All Income

Last year, as the median U.S. household income declined, income inequality rose to its highest level in decades. The top 20% of households took in 51.1% of all income in 2011, up from 50.2% in 2010 and the highest share since at least 1967, according to the Census Bureau.

The growth at the top came at the expense of middle- and low-income earners. After the top, each quintile of income earners saw their share of income decrease, with the biggest drop among middle income earners. The middle fifth of households took in 14.3% of all income last year, the lowest since 1967 and down from 14.6% in 2010.

“Many middle class families have moved into the lower-income quintiles creating an income distribution that is less flat,” economists at IHS Global Insight wrote in a recent note to clients.

Global Insight, a Lexington, Mass. research firm, notes the aging of the population is also weighing on incomes. “As more and more of the population enters retirement, income shrinks and more households move into lower income categories,” the firm wrote. “The baby boomers, those born between 1946 and 1964, are now starting to move into retirement age. Since this is a relatively large group, there will continue to be a negative impact on median household income from this age cohort.”